Selecting a mortgage lender for your home purchase is a big decision.

  • Know your credit score and do the damage control if necessary – Your mortgage interest rate will depend on your credit score. Credit reports may affect your Home Mortgage rates, refinancing, credit card approvals, apartment requests or even your job application. Annual Credit Report is authorized by Federal law to provide a FREE copy of your credit report from three major credit bureaus once every 12 months. Get your credit reports from The higher your credit score, the more bargaining power you’ll have.
  • Know the difference between interest rate and APR – APR (annual percentage rate), the total cost of borrowing money. In addition to the interest, or finance charge, APR also includes certain fees you’ll pay to borrow the money, such as a mortgage origination fee charged by the lender.
  • Look beyond the APR – Ask how they communicate with clients (phone, email, etc.) and how quickly you can expect them to respond to messages, it can be infuriating to have to wait several days when you ask your lender for a status update. You can also ask about turnaround times, fees you’ll be expected to pay, and how much of a down payment they’ll require. 
  • Shop around – It means taking the time and completing the pre-approval process with at least a few lenders. Finally, don’t worry about your credit suffering from completing several mortgage applications and credit checks. There’s a special provision in the FICO formula that allows rate-shopping for mortgages and auto loans. As long as all of your applications occur within a two-week period, they will count as a single credit inquiry for scoring purposes.
  • Get underwriting pre-approval – Not pre-qualification, but underwriting pre-approval, this will boost your chances of getting your offer accepted.
  • Ask the right questions and read the fine print – Find out about requirements and fees, including costs beyond principal and interest payments.